王辉耀:ProtectingSMEsshouldbethesecondCOVID-19battlefield
(2020-03-13 09:47:06)Since January 2020, the COVID-19 outbreak has affected every
aspect of Chinese society. With the escalation of prevention and
control measures as well as the joint efforts in all sectors of
society, hopefully it will be possible to curb the further spread
of the virus. But inevitably, the impact of the long-lasting
epidemic on the domestic economy, especially on the small- and
middle-sized enterprises (SMEs), is emerging.
During the outbreak, many companies, especially SMEs from the
catering sector and tourism industry, have been suffering heavy
losses and even facing the risks of bankruptcy due to the
disruption of logistics, instability of the supply chain, and the
plunge in demand.
Some SMEs which are experiencing the twofold difficulties of
both being short of funds and a sluggish market, are on the verge
of bankruptcy.
Meanwhile, many poultry farms are also suffering heavy losses
due to lack of feed, poor logistics and market contraction.
As the backbone of China's economy, SMEs provide more than 80
percent of urban employment. If the epidemic lasts too long, it
will be difficult for many enterprises to survive.
SME bankruptcies could worsen unemployment, cause economic
slowdown and loss of income. At this critical moment, protecting
SMEs should become the second battleground against COVID-19. The
government and big corporations should take an active role in
helping the SMEs to get through this crisis.
From the government side, there are two main points to
consider. First, it should support the restoration of some business
activities on the premise that the spread of COVID-19 is under
control. Besides, governments should ensure the normal working
order of logistics services, the supply chain and industrial chain
instead of suspending all the production and operation activities.
Second, governments at any level could work out special supportive
policies for SMEs in terms of salaries, social security payments
and bank credit, which are deeply concerned with SMEs, such as
establishing special funds, reducing charges, taxes and interest
rates, delaying the deadline for income tax and social insurance
payments, reducing rents, and extending financing channels to lower
running costs.
As SMEs, they are also supposed to actively protect themselves
by increasing revenues, reducing expenditure and seeking
opportunities during the hard times by giving impetus to management
innovation and transition. As is known, the epidemic has inflicted
heavy losses on offline retail, catering business, tourism, and
educational institutions. But at the same time, there are some new
points emerging from the tertiary industry, such as the online
retail, online medical care, online games, and logistics and
express services.
Enterprises can adjust their business models in accordance
with the new consumption trends, and can also extend channels of
business and innovate corporate cooperation models, such as online
business, employee sharing and telecommuting to enhance their
ability to resist risks.
In a short term, the outbreak of COVID-19 has hit severely hit
China's economy. But in a long term, with a solid economic base,
the momentum of China's economy developing to new levels will not
change. Given the influence of the epidemic, China's economy may
suffer severely in the first quarter. But the business that was
forced to suspend in the first quarter is likely to recover in the
next three quarters.
This COVID-19 epidemic subjects the government to a test and
has revealed some problems that need to be improved. But this
epidemic has also once again shown that the perseverance and
solidarity of the Chinese people and enterprises at a time of
crisis which are the source of the strength for our country's
prosperity.
At present, even though the epidemic is ongoing, it is
necessary for the whole country and all sectors of society to work
together to fight against the virus, as well as save SMEs and avoid
the economic slump. In this battle, no one can stay aside. We are
all looking forward to the end of the epidemic and the return of
normalcy as soon as possible.
From CGTN, 2020-2-20